July 3, 2006 - In comments made to the Bloomberg financial news service, Ubisoft president Yves Guillemot expressed optimism about the prospects for the next-generation videogame consoles, but tempered this confidence by voicing concern regarding the competitive position of Sony's PlayStation 3.

Yves Guillemot

According to the report, Guillemot stated that while Sony's next-generation offering would see "enormous demand" by the system's early-adopters, he was concerned that the system's pricing would present a significant entry barrier to those wanting to purchase the system after its initial appearance.

In order to counteract this potential issue, Guillemot suggested that Sony drop the price of the PlayStation 3 in 2007 in order to more effectively compete with Microsoft's Xbox 360. Despite Microsoft denials to the contrary, many industry analysts have speculated that the company will drop the price of its next-generation console in order to make it more attractive relative to the PlayStation 3's higher price point.

The notion of a price drop for the PlayStation 3 in 2007 may present a problem for Sony which is rumored to be enduring a fairly significant loss on each console sold already due to the inclusion of such technologies as the Cell processor and Blu-ray optical drive. It is unclear whether the company will have significant enough economies of scope and scale by 2007 to reduce manufacturing costs to make a PlayStation 3 price drop viable.

Guillemot concluded his remarks to Bloomberg by stating that he agreed with Microsoft chairman Bill Gates that 2007 will be a "crucial year" in the next-generation console competition.

Ill pay what ever i afto for it, as I never did expect it to be cheap this time around, betting the nex gen after this may very well cost 1 k or more befor the first price drops and i can plainly see why its so high, Ill buy it anyway.

the X-Box 360 is like $650 (AUD) and the PS3 is tipped to be $999 (AUD). I've got $5,000 in the bank, so I'll be getting one no matter the price, but this guy is right, the price will stop PS3 from competing with the 360 if it was say $100-$200 less.

They should look at it like this, put a higher price on it, sell less. put a lower price on it, sell more. Meaning you're more likely to make a profit with the price lower as more people can afford to buy them.

the X-Box 360 is like $650 (AUD) and the PS3 is tipped to be $999 (AUD). I've got $5,000 in the bank, so I'll be getting one no matter the price, but this guy is right, the price will stop PS3 from competing with the 360 if it was say $100-$200 less.

They should look at it like this, put a higher price on it, sell less. put a lower price on it, sell more. Meaning you're more likely to make a profit with the price lower as more people can afford to buy them.

Yes, but they will have greater losses first year, and who knows once it can be produced more adiqutly if there able to make profit the next, if they drop it to much they wont make enough profit, and its already pulling a price gap even bigger then the PS2s was, I dunno if theyd be able to drop it.

I don't know how Sony are going to pull this off I'm going to buy it but I'm going to have a hard time paying for it, $999 is fair in a way I don't know exactly how much it cost to produce a PS3 but I've heard it's way may than the price they are selling it at.

I have a feeling Xbox-360 will outsell the PS3 even though it had a headstart.

Hmm I don't think it is really the cost to make a PS3 that makes the price so high, I think it is more that they want to recover money lost through developing the new cell processor and making the os for it. Also Sony have been making many bad decisions which have lost them business. Hopefully Blu-Ray will take off but Sony seem to be obsessed with owning formats to lock people in atm.They need PS3 to work or their gonna have some serious problems.